>> stahl: you look that different? >> i would say so, yeah. >> i'm steve kroft. >> i'm leslie stahl. >> i'm bill whitaker. >> i'm scott pelley. those stories, tonight on "60 minutes." >> reporter: you're in charge. >> >> good evening, on friday the report about 200,000 jobs which are added in august. next weekend, president obama will be in china for his final leadership conference.

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that appear to be legitimate. they do it by moving the dirty money through a maze of dummy corporations and offshore bank accounts that conceal their identity and the source of the funds. and most of it would never happen without the help-- witting or unwitting-- of lawyers, accountants and incorporators, the people who actually create these anonymous shell companies and help move the money. in fact, the u.s. has become one of the most popular places in the world to do it. hidden camera footage, we showed how easy it seems to have become to conceal questionable funds from law enforcement and the public. you need look no further for evidence than the changing skyline of new york city, where much of the priciest residential real estate has been snapped up not by individuals but by anonymous shell companies with secret owners. there's nothing illegal about it

to tell if you don't know who the real buyers are. it is one of the reasons global witness, a london-based non- profit organization that exposes international corruption, came to new york city in 2014. it wanted to see how helpful u.s. lawyers would be in concealing questionable funds. this hidden camera footage was shot in law firms across manhattan without the lawyers' knowledge by the man in the gray coat with the german accent. >> lawrence gabe: so it's ralph? >> ralph kayser: ralph kayser. >> kroft: "ralph kayser" is not his real name. he's an investigator for global witness posing here as the representative of a government official from a poor west african country who wants to move millions of dollars in suspicious funds into the united states, and he needs the lawyers' help. >> ross: are you gonna tell me what country and what minister this is? >> kayser: i can't tell you. it's one of those mineral rich countries in west africa.

and the other lawyers were told secrecy was essential, because the african minister had amassed his fortune collecting special payments from foreign companies that he'd helped obtain valuable mineral rights. >> kayser: so companies are eager to get hold of rare earth or other minerals. and so they pay some special money for it. i wouldn't name it bribe. i would say "facilitation money." >> kroft: kayser said it was all legal. he told attorney james silkenat and the other lawyers that the townhouse, a jet and a yacht, but his name must not be connected to the purchases. >> kayser: if his name now would appear in connection with buying some real estate here and other items, it would look, at least, very, very embarrassing. >> james silkenat: right. because his... presumably his salary in, wherever it is, would not cover the kinds of acquisitions we're talking about. >> kayser: oh, for sure.

and so how can we make sure that he is being able to-to buy property here and to live a nice life, but his name being out? >> silkenat: right. any guesses as to how much money we're talking about for the brownstone and the other items? >> kayser: i mean, the brownstone, talk about $10 million. for second-hand gulfstream, i could imagine $10, $20 million. a yacht would be at least $200, $300 million. >> kroft: the fictitious story of the african minister was cooked up in global witness' london office, based on an actual money laundering case. the investigator phoned 50 new york law firms with experience in private asset protection and managed to get face-to-face meetings with 16 different lawyers in 13 firms. >> kayser: i'm very frank. it's, i would say, "gray money." i think somebody told me you name it "black money." >> kroft: global witness says

to give the lawyers good reason to suspect that the minister's millions came from official corruption, and they all did. >> kayser: it's only that the money is a bit, let's say... >> gabe: tainted. >> kayser: tainted, thank you very much. >> gabe: okay, that's a nice word. okay. >> kayser: or, you gave another expression? koplik: honest graft. kayser: honest graft! okay, fine. so i have to be frank. it's honest graft. how would you name it? >> ross: some people call it bribes. >> kayser: nah, i wouldn't name it bribe... >> ross: never. right, no, course not. >> kayser: bec so, okay, bribe... is actually bribe. >> charmian gooch: you know, the story of the fictitious african minister would probably have raised eyebrows for the average person on the street. >> kroft: charmian gooch is the co-founder of global witness, a public advocacy group that exposes corruption in the developing world. previous undercover investigations exposed the global trade in african blood diamonds. this investigation, gooch says, exposes serious flaws in the u.s. legal system that have made it a hub for international money

>> gooch: what the lawyers laid out for us in some detail was all the different possibilities and ways in which it could be done. >> kroft: what you're saying is if you want to get dirty money into the united states, it's not that hard to do. >> gooch: what i'm saying is there is an open door and it's pretty shocking and pretty concerning, because that money could be coming from anywhere. >> kroft: of the 16 lawyers that global witness recorded in these preliminary meetings, only attorney jeffrey herrmann flatly declined to participate and showed ralph kayser the door. questions about that. >> kayser: yes? >> herrmann: under the foreign corrupt practices act. >> kayser: right. >> herrmann: and under the foreign corrupt practices act, bribing foreign officials is illegal. >> kayser: by americans. >> herrmann: by americans. >> kayser: but americans are not involved. so it's money from other nation-

entities, not american nationals... >> herrmann: it's not for me. >> kayser: pardon me? >> herrmann: it's not for me. >> kroft: aside from that one exception, 12 out of the 13 law firms, including 15 out of the 16 lawyers, not only heard ralph kayser out, they suggested ways that the suspicious funds could be moved into the u.s. without compromising the minister's identity. attorney james silkenat was selected by global witness because at the time, he was president of the american bar association. yet he and his colleague, hugh finnegan, provided what former prosecutors told us was a roadmap of how to conceal the source of the funds using layers of anonymous, interconnected shell companies in multiple jurisdictions. >> finnegan: presumably, we would set up a little bit of a series of owners to try and, again, protect privacy as much as anything else. >> kayser: yeah. >> silkenat: so company a is owned by company b, which is owned jointly by company c and

the majority of the shares of c and d. >> kayser: so we, we create several companies? >> finnegan: yes. >> kayser: all in new york or different states? >> finnegan: well, like i said, at some point, probably pretty quickly, you'd go offshore. >> kroft: attorney john jankoff and his partner, lawrence gabe, recommended variations of the same strategy. >> jankoff: a lot of people in africa use the isle of man. some of them use liechtenstein... >> gabe: so he would just take his millions of dollars, put it in iof swiss bank account. the swiss will have it. and... and then... >> gabe: and then he comes to us. >> jankoff: and then he comes to us and says, "i want to buy a townhouse." >> kroft: attorney marc koplik also suggested that the minister could move his money out of west africa to europe, where it could be "scrubbed" in an anonymous corporate entity that his firm would be happy to set up. >> koplik: the money as it sits now, is it in his name? >> kayser: it's in different names.

>> kayser: including his name, yes? >> koplik: so we have to scrub it at the beginning, if we can, or scrub it at the intermediary location that i mentioned. >> kayser: so how to do this, intermediary? that means a bank in? >> koplik: we'll say luxembourg. >> kayser: luxembourg. >> koplik: we will set up an appropriate entity call it clientoverseas.com or whatever, and then that will send money into the united states. >> kroft: if that was a banker talking instead of a lawyer, he could be in serious trouble. that's because under u.s. law, bankers are required to report suspicious financial activity to the authorities. lawyers are under no such legal obligation. >> gooch: banks in america are required to know their customer or required to be very cognizant of risk and to report on it if there... if there is an issue there around money laundering. and yet, absolutely bizarrely, american lawyers aren't.

has shown the potential for what could happen because of that lack of regulation. >> kroft: global witness says that anomaly is just one of the flaws in the u.s. legal system that helps facilitate money laundering. >> and we're going to call it here, "anonymous, inc." >> kroft: another is the ease in which anonymous shell companies can be set up here to conceal ownership of money and assets. last year two million new corporations were set up in the united states, many with no offices, products or employees... just an address and perhaps a bank account. >> gooch: in many states across america, you need less identification to set up and open up an anonymous company than you do to get a library card. >> kroft: gooch says anonymous shell companies are like getaway cars for crooks, designed to put them as far way as possible from the scene of their crime. according to a world bank study, the u.s. was the favorite place for corrupt officials to set up anonymous shell companies.

up as the easiest place to set up an anonymous company, after kenya, out of 180 countries. >> kroft: after kenya? >> gooch: after kenya. >> kroft: so did that study have anything to do with your decision to go ahead and do these undercover investigations? >> gooch: it inspired us. i mean, we almost thought, "it can't be this bad, can it?" and, unfortunately, what we found is it is. >> kroft: all of the attorneys expressed some concerns, like this one from gerald ross. >> ross: i've got to be very careful myself. i don't want to do something if it looks like i'm laundering money. and that would cost me my license and-and i... just don't do that. >> kroft: but later, he suggested that the questionable money could be wired directly into his client escrow account, bypassing scrutiny from the banks. >> ross: when i get money from my other clients, it always comes here with some strange name on it. i don't even ask. >> kayser: and nobody ask? >> ross: it doesn't come from minister joe jones.

would need to get a legal opinion that the money was clean, then suggested that the minister use front men to open up overseas bank accounts. >> jankoff: if it's not in his name, then he needs what is known as a "straw man." practically speaking if the money leaves the country his name should not be attached to the wire. it should be other people's names. >> poncy: and we know this happens. we know this happens. this is how money laundering ocll but that does not mitigate the power of seeing it up close. >> kroft: we showed the tapes to chip poncy, a former top official at the treasury department whose job was to stop financial crime, terrorist financing and money laundering. he says there's nothing wrong with lawyers setting up anonymous shell companies to protect a client's privacy, but if it's done to conceal criminal activity, that's when it becomes a problem. >> poncy: there's a clear pitch consistently presented in every

amounts to an incredible number of red flags that scream corruption. >> kroft: dirty money? >> poncy: dirty money. >> kroft: bad actors? >> poncy: bad actors. they don't want to be found and they have a need. they've got to move their money from a point where they've received corrupt proceeds in this case to a point where they can enjoy those proceeds. and to get 'em from... to get this money from point a to point b, they need help in laundering it, effectively. >> kroft: poncy says he was dismayed with the ease and the comfort with which attorneys seemed to be willing to turn a that was likely to be illegal. >> poncy: what's essential to recognize is that this is after it's been revealed that the potential client is representing an african minister with hundreds of millions of dollars of funds received through, effectively, bribes. >> kroft: this is more than legal advice? >> poncy: this is legal advice on how to evade controls, or at a minimum, very clear global standards on financial transparency to allow our

of crime. >> kroft: attorney marc koplik told the global witness investigator that he preferred using money managers and investment firms to move funds. he thought it was less risky than using banks. >> koplik: and i would suggest three or four to you. some are bigger. some are smaller. the smaller ones are often more flexible and understanding and less concerned about their reputation. because they fly, to a greater extent, below the radar screen. >> kroft: sometimes the advice took the form of suggesting banks and countries that might be less vigilant about money laundering. >> silkenat: we would have to look into how far specific banks looked into, you know, the, you know, the know your customer laws and how far they would dig. >> finnegan: in many ways, you'd probably be better off with a smaller bank because...

banks are much more serious about looking into that stuff. >> kayser: their reputation. >> finnegan: right. yes. >> silkenat: and there may be other banking systems that are less rigorous on this than the u.s. would be. >> kayser: what would it be? >> silkenat: the usual banking havens, i think, would be ones you would want to consider. we could provide you with a list of countries where the banking systems require less detail on ownership or source of funds. >> kroft: while james silkenat, the former president of the american bar association, and his partner, hugh finnegan, listened to the pitch and suggested ways in which they might be able to help, they were also the most suspicious of ralph kayser and his african minister, beginning just five minutes into the meeting. >> silkenat: we need to talk

about where he got the money and how to explain that. >> kayser: that's it. >> silkenat: there is... there are issues there. the transactions is which he would be involved here wouldn't be part of facilitating payments, but if that's really where the money came from and if there were, you know, "crimes" committed someplace else, that- that starts to be an issue. >> kroft: they were also the most cautious about moving forward. towards the end of the meeting, hugh finnegan, who is off camera here, said the firm would feel obligated to report anything it believed to be illegal. >> finnegan: bearing in mind of what you said, no american law was violated, no local law was violated, but, you know, if we're aware that a crime is being committed, we have an obligation to report that. >> kroft: mr. silkenat says, "we need to talk about the risks or just concerns about where he got

>> poncy: that, that, and that's, that's a welcome... >> kroft: he's already been told how, where the money came from and how he got the money. >> poncy: correct. so it-it's a healthy recognition that there's an issue here. >> kroft: if you could ask him anything about this meeting, what would it be? >> poncy: what's going through your head? why are you continuing this conversation? why not just say no? is the business that important? >> kroft: when we first aired this story, neither silkenat nor finnegan would agree to an on- camera interview. saying they only discussed generic information that could be found on the internet and that their conduct was "entirely appropriate." "had the camera followed us after the meeting," they wrote, "it would have shown us agreeing that kayser was disreputable and that we would not deal with him again." the other lawyers declined on- camera interviews. when we come back, we'll take a look at the legal and ethical implications of what you've just

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>> kroft: when a non-profit organization called global witness began an investigation into money laundering a little over two years ago, it sent an investigator to new york to secretly record hidden camera

as we first reported in january, its investigator was posing as the representative of an african government minister trying to move millions of dollars in suspicious funds into the u.s. global witness, which specializes in exposing international corruption, wanted to see how much help the lawyers would provide in setting up anonymous shell companies and offshore bank accounts to move the suspicious funds. >> silkenat: good to see you. >> kayser: good to see you. >> kroft: the undercover investigator, who called himself ralph kayser, told the lawyers that the minister had used his official position to collect tens of millions of dollars in special payments from foreign companies to help them obtain valuable mineral rights. he wanted to move the money to the united states to buy a house, a jet, and a yacht. >> kayser: so therefore, he wants to bring in the money into the u.s. so, starting with the brownstone and then, probably, buying a

commission the building of a yacht, and buy, probably, more property. >> kroft: the story was intentionally devised to raise red flags and lead the lawyers to believe that the minister's money was dirty. during the meetings, only one of the 16 lawyers, jeffrey herrmann, told him no. >> herrmann: this ain't for me. my standards are higher. >> kroft: the rest expressed varying degrees of interest, with most of them offering advice on how it could be done. soup to nuts. so, there's no limitation. we don't say, "oh, we don't do windows, or we don't deal with the financial money managers," or whatever. no. we orchestrate and organize the entire thing. we're happy to take that responsibility. >> kroft: what's important to point out-- and it cannot be overstated-- is that none of the lawyers we've shown you broke any laws, in part because the african minister didn't really exist.

witness' charmian gooch said no money ever changed hands. so this is sort of a morality test? >> gooch: it wasn't. it was a... it was a test on the system. >> kroft: you know, people could make the argument, "look, all these guys did, really, was just listen to this person that came into their office. they didn't make a deal, they didn't sign up. they said, 'we need to do some more research.'" >> gooch: and you know what? they'd be absolutely right to say that, but they'd need to say something else, too, which is that those lawyers laid out, in often considerable detail, a bring money into america. >> kroft: none of the lawyers agreed to take on the african minister as a client, nor were they asked to. it was a preliminary meeting that ended with most of the attorneys expressing interest in continuing the dialogue, and some enthusiastic about landing the business. >> silkenat: i'm happy to chat whenever it's possible to move the ball forward on this. >> kayser: fantastic, great. >> silkenat: good. >> kayser: thank you so much. >> silkenat: thanks for coming in.

as the money was clean, and gave no indication that they planned to do any checking themselves. they went so far as to discuss legal fees. >> koplik: legal fees will be substantial, albert. correct me i'm wrong-- $50,000 to $100,000. >> kroft: koplik also suggested conducting a test in which a portion of the suspicious funds would be sent into the united states. >> koplik: a million dollars. >> kayser: a million dollars, so, as a test? >> albert grant: yeah. >> kayser: because i said, probably you would start with around, $50 million, probably, i could imagine? dollars. >> kayser: a million dollars. >> koplik: if anything goes wrong, it'll be painful, but it won't be life threatening. >> kayser: right. exactly. >> kroft: john jankoff and his partner, lawrence gabe, who is off camera here, also seemed willing to go forward. >> jankoff: we would orchestrate it. one legal fee to cover everything. >> kroft: however, gabe did express some concerns about the transactions. >> kayser: who can set up this structure? could you do it? >> jankoff: yeah, your brother- in-law does it all the time. >> gabe: well, okay. but i-i-i don't think he does it

questionable. and that we have to find out about. >> kroft: at the end of that meeting, they looked forward to the next conversation on the telephone, not on email. >> gabe: okay, give me a phone number where we can reach you? >> kayser: ah... >> gabe: i'm certainly not putting this in emails. >> kayser: sending an email with just an outline would be fine, as well, so it's... >> jankoff: i don't like emails. >> kayser: you don't like emails? >> gabe: that's how you catch people. >> kroft: the hidden camera tapes raise all sorts of ethical questions not just about the behavior of the lawyers, but about the methods used by global witness in making them. we showed the footage to bill simon, a law professor at columbia university, who is one of the country's top legal ethicists. >> bill simon: i think it draws attention to the fact that lawyers may be playing an important role in money laundering that requires more scrutiny. >> kroft: have you ever seen anything like this before? >> simon: no. >> kroft: never? >> simon: never. >> kroft: what's your overall impression of it? >> simon: any lawyer's going to be uncomfortable about the fact that this was a sting in which someone lied his way into a

recorded statements a lawyer was... thought he was making to a client. that's kind of unprecedented and it's kind of inconsistent with the bar's norms about confidentiality. so i'm a little uneasy about that. on the other hand, i think that the tapes expose conduct of great public consequence. >> kroft: you think it's valuable that the public sees it? >> simon: yeah. i think it's very valuable. confidentiality is for the benefit of the client, not the lawyer. because conduct that goes on under the protection of confidentiality is never scrutinized by the public. and lawyers are never accountable for it. so the sting actually brings some accountability to conduct that ought to be accountable. >> kroft: in its own report, global witness includes an opinion from two legal ethicists, including bill simon of columbia. it says that if attorneys marc koplik, john jankoff, and gerald ross had been responding to a real request, their conduct

professional responsibilities of lawyers." it said the attorneys displayed "a cynical and evasive attitude toward law." the ethicists also noted that the rules are vague, and "we do not expect that all lawyers will agree with us." simon put then-a.b.a. president james silkenat and his partner, hugh finnegan, in a different category, even though they provided advice on how to move questionable funds into the u.s. what makes silkenat different from the other lawyers? im clear that he would not assist illegal conduct. and he even indicated at one point that he would report the client if he found the client engaged in illegal conduct. and then, also, silkenat was fairly clear that he would need more information before he agreed to represent the client. >> kroft: on the other hand, he clearly seems interested in this. >> simon: he clearly seems interested and even a little enthusiastic about it. >> kroft: anything wrong with that?

responsibility authority, i could say it was inconsistent with his duties under the rules. >> kroft: simon says the only lawyer who truly fulfilled the ideals of the legal profession was jeffrey herrmann, who listened to the pitch, decided it probably involved illegal activity, and ended the meeting. >> herrmann: this ain't for me. my standards are higher. i'm not interested. >> kayser: do you... do you know anybody who would be able to do so? >> herrmann: i don't think so, and i wouldn't recommend them >> kayser: yeah, yeah. >> herrmann: because those persons would be insulted. >> kroft: charmian gooch says the point of global witness' hidden camera investigation was not to target or entrap lawyers for bad behavior. the problem, she says, are lax laws and toothless regulations that make it ridiculously easy for criminals to launder $300 billion a year in the united states. >> gooch: this is real public interest information. how are you going to get that out to them if you can't show them what's happening behind

this any other way? >> gooch: i think unless the public and policy makers can really see for themselves what gets said across the desk, across the table in a meeting like this, it's kind of hard to really believe and take on board. >> kroft: gooch says there's a simple solution, but it's been politically impossible to achieve in the united states. just ask carl levin, the longtime chairman of the senate's permanent subcommittee on investigation. until he retired last year, he that would require the states to collect one additional piece of information from people forming corporations. >> carl levin: one line-- who's the real owner. not who's the agent forming it. not who's the lawyer representing the owner. who is the beneficial owner, the real owner? and it's-it's not at all complicated. >> kroft: but the bill has never made it out of committee, in part because of strong opposition from the american bar association. >> kroft: what's the american bar association's objection to

>> levin: the lawyers are helping form corporations, and they're afraid, i guess, that if you put a damper on the formation of corporations, that you're putting some damper on legal business. >> kroft: the irony is that the white house, the justice department and the u.s. treasury have been among the world's strongest proponents for cracking down on money laundering. yet the u.s. is one of the easiest places in the world to set up the anonymous companies that facilitate it. >> gooch: it's a heck of a paradox, isn't it? american bar association needs to get behind the need for regulation, in the way that european lawyers have had to do exactly the same. and i think that you know, it... it's... i think the american government needs to answer that question. >> kroft: global witness may have inadvertently gotten a sassy answer to that question from attorney marc koplik in its hidden camera video. koplik explained to the representative of the phony african minister why he never

>> koplik: they don't send the lawyers to jail, because we run the country. >> kayser: do you run the country? >> koplik: still do. >> kayser: i love it. >> koplik: still do. >> grant: i should say some lawyers run the country. >> kayser: so, you are... you are some of them? two of them? >> koplik: we're still members of a privileged, privilege class in this country. >> kayser: so, how, what does it mean you run the country? it means you? >> koplik: we make the laws, and when we do so, we make them in a way that is advantageous to the lawyers. >> kroft: three days after our several members of congress introduced bipartisan legislation requiring attorneys, and anyone else creating anonymous shell companies here in the u.s., to disclose the real owners behind those companies. the obama administration followed several months later with new rules aimed at

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>> leslie stahl: just two and a half years ago, schuyler bailar was one of the fastest high school swimmers in the country, a champion breaststroker with a stellar academic record who had the ivy league coming to call. schuyler's first choice was harvard, and as luck would have it, the harvard women's swim team was in need of a breaststroker. schuyler was offered a spot, and a seemingly perfect match was made. but when harvard's swimmers hit the pool deck last fall, schuyler had switched teams. schuyler now swims with the men. as we first reported in april,

athletic team in the nation to include an openly transgender young man is also the story of a bigger transformation. in attitudes, acceptance, and the larger conversation about what it means to be transgender. how different are you? if i had met you a couple of years ago and then saw you today? >> schuyler bailar: physically you'd say-- yeah, you might not recognize me. ( laughs ) >> stahl: you look that different? >> schuyler bailar: i'd say so. . >> stahl: we'd say so too. this is what schuyler bailar looked like in high school. from the outside, schuyler back then appeared to be a young woman who had it all: outstanding grades in school plus all-american times in the pool. an attractive combination to swim coaches from top-notch colleges. >> stephanie morawski: she was a very strong breaststroker, and those times were fast. >> stahl: harvard women's coach

>> morawski: she was engaging, energetic and she was somebody that i really thought would do well at harvard. >> stahl: harvard was schuyler's first choice. but this fairytale had a little wrinkle, one that may have started before schuyler even learned to swim. when you were a little girl, were you a typical little girl? two, three four--? >> schuyler bailar: definitely no. >> stahl: even three, four, five? >> schuyler bailar: my parents dressed me in pink dresses and bow ties, and i had a doll. but i don't thi even then because i would-- i would like to rip them off and i didn't want to wear the dresses. >> gregor bailar: "i'm not wearing a dress." ( laughs ) >> stahl: gregor and terry bailar are schuyler's parents. did people think schuyler was a boy? >> terry hong: all the time. ( laughs ) >> stahl: terry and gregor just assumed schuyler was a tomboy who preferred short hair and hanging out with the guys. that their daughter might be transgender never occurred to them, though there were clues.

in the present and the future. she came home with this. it made no sense at the time why the future meant becoming an old man with a moustache. and the confusion only worsened when puberty hit, and things like breasts began to appear. >> schuyler bailar: i was like, "that's not something i want. and i don't really know why, but i just know i don't want that." >> stahl: even though it felt wrong, schuyler saw no choice but to try and make it work as a girl: with long hair and but it backfired. she developed major eating disorders. >> stahl: bulimia? anorexia? >> terry hong: both. >> stahl: both? >> gregor bailar: it was serious. >> terry hong: we feared for his life. >> gregor bailar: yeah. >> stahl: they postponed schuyler's going to harvard and got her help at an eating disorders program. when she went to hear some transgender men speak at a local church, wham. everything started to make sense. >> schuyler bailar: i was like,

like, this has-- this is 100%, everything that they're saying, that's me." and i just melted down. i just started crying and sobbing. and my dad was picking me up because he was coming to visit me. >> stahl: that very day? >> schuyler bailar: yeah, and i walked out to him and i said-- and i was sobbing, i was like-- and he just hugged me. >> gregor bailar: he came out, you know, in tears-- ( crying ) >> schuyler bailar: and eventually he said, "d-- like, what's-- what's wrong, schuyler?" and i said, "dad, i think i'm transgender." >> stahl: so how did you handle it? and he cried and cried. >> schuyler bailar: it just made me realize, like, i wanted that so badly but i knew how hard it was going to be. and i-- i was like, "what about swimming? what about my body? what about surgery? what about the money? what about people? what are we going to say? what about my grandparents? what about my brother?" like, ( laughs ) everything at once. ( laughs ) i was like, "but i want this, and i know i want this." >> stahl: schuyler's mental health improved quickly. but there was still the matter

now be coming to college, as a man. so what was your reaction? >> morawski: i was surprised. but the-- really, the big question schuyler had was, "can i still swim on your team?" >> stahl: what did you think? did you think someone who identified as a man could swim on the women's team? >> morawski: i thought logistically we might have some issues that we would have to work out. >> stahl: like n.c.a.a. rules. turns out the n-c-double-a has a who identify as male but were born female to compete on a women's team, as long as they don't take male hormones. so stephanie morawski said yes, and schuyler started making plans to live something of a double life: to be a man on harvard's campus the next fall, but a woman on harvard's swim team. meanwhile, schuyler came out as

so-called "top surgery": a double mastectomy to remove the breasts he hadn't wanted. the whole situation started to worry coach morawski. >> terry hong: i think stephanie was the first to realize that schuyler's plan of being a woman in the water but a man outside was gonna be-- >> gregor bailar: difficult at best. >> terry hong: --totally detrimental ( laughter ) to her psyche. >> morawski: when you enroll in college, it's an opportunity to start over again. >> stahl: you can reinvent yourself. >> morawski: you can reinvent yourself. schuyler, because he wanted to reinvent himself as schuyler as a male, but was being held back by the athletic piece of it. >> stahl: she discussed her concerns with her friend and colleague, harvard men's swim coach kevin tyrrell. >> morawski: kevin was-- just kind of looked at me and said, "i don't-- i agree with you, i don't think that you can have a dual identity. why doesn't he just swim for my team?" >> stahl: just like that. >> morawski: just like that.

if you're happy being a male-- and that's what you want to identify as, then it makes sense to be on the men's swimming team. >> stahl: that would be allowed under n.c.a..a rules and he would be permitted to take testosterone. but before giving schuyler the option of joining the team, tyrrell called a meeting of his swimmers to discuss what he thought would be a very sensitive issue. what were the reactions? >> tyrrell: they didn't see it as a big deal. questions in my mind to ask them, and i asked them, and they were like-- "that sounds fine." ( laughs ) >> stahl: when they didn't even express concern about the locker room, tyrrell wasn't sure he believed them. >> tyrrell: so i concluded, "well guys, you know, let's-- come into my office, you know, if you want to talk to me one on one, please do." >> stahl: you thought some might be holding back? >> tyrrell: right. just because of group think and- - and then so, no one came into the office. >> stahl: and it surprised you?

20 years ago, and i think it would have been a different process for me. >> stahl: but choosing between the women's and men's teams was agonizing for schuyler, who was used to winning as a woman. on the men's team, he would be at the back of the pack. >> morawski: schuyler had to do a lot of thinking about what mattered most. was it breaking records, or was it really being happy? >> stahl: you put that to him. >> morawski: i did. >> stahl: that was last spring. >> f >> stahl: this fall, at harvard's meet against ivy league rival columbia, we watched as schuyler got ready -- scars visible across his chest - - to step up onto the starting block to swim with the men, as a man. >> schuyler bailar: my goal to myself, because it's not realistic for me to win anything right now, at all, ( laughs ) is to try to beat at least one person in every race.

>> schuyler bailar: almost. yesterday, i did get last in my second event. but-- but that's the only one. and i've done eight races. so, seven out of eight of them ( laughs ) i've gotten not last. >> stahl: that's-- i-- i'm really surprised. >> schuyler bailar: i'm really happy about it. >> stahl: and he's happy about living as a man in all facets of his life. he takes the n.c.a.a.-approved dosage of testosterone which has been lowering his voice, broadening his shoulders, and bringing him closer to middle school. you have a little mustache? >> schuyler bailar: yes, i have a little mustache, little peach fuzz. ( laughter ) >> stahl: are you shaving? >> schuyler bailar: yes. and i shaved because i wanted to look nice for the interview. ( laughs ) >> stahl: schuyler has been remarkably open about all this, chronicling the whole process of his transition on social media, complete with before and after images. and he's invited people to ask when they have questions. >> stahl: you are almost passionate about answering questions. >> schuyler bailar: yes.

ignorant. period. because it's not taught in school. like if you don't know a lot of trans people, how are you supposed to know the answers to the questions about people who are transgender? >> stahl: what kind of questions do you get? >> schuyler bailar: "do you still have a vagina?" ( laughs ) like, people like to ask that one. and a lot of people get really uncomfortable, like a lot of trans people hate that question. >> stahl: you don't hate that question? >> schuyler bailar: i don't like it, but i try to see it from their perspective. and i'm like, okay, if they-- if, like-- if i were in their po-- like, their position, i would probably be wondering the same thing. >> stahl: well, what's the answer to the question? >> schuyler bail: i mean, that's the answer to the question. >> stahl: that's the answer-- >> schuyler bailar: it's, like-- >> stahl: --to the question. >> schuyler bailar: it's a simple question. >> stahl: he says being transgender has nothing to do with whether or not someone gets "bottom surgery," and it also has nothing to do with sexual orientation. schuyler has always been attracted to girls; in high school, as a young woman, schuyler had come out as gay; now, as a man, he's straight. but there is one small matter we discovered, where he's leaving

>> schuyler bailar: i don't know about that. that's a long story. ( laughter ) >> stahl: really? >> schuyler bailar: i-- i-- there are, there are trans men that get pregnant because they want to have biological children. >> stahl: so this is in your head, that one day you might give birth? >> schuyler bailar: might is-- is in bold-- and underlined and italicked. but yes.. yeah. i don't know. i'm 19. >> stahl: 19 and healthy. back at that harvard-columbia meet we went to-- >> pull, schuyler, pull! >> stahl: --schuyler achieved his goal of beating one swimmer and he beat his own previous best time by more than a second. but we did notice schuyler during the women's competition, cheering on his would-have-been teammates in his old event. and we were pretty sure he noticed that his old times would have won first place. have you ever in the whole time second-guessed what you did? >> schuyler bailar: i think i would be lying if i said no. >> stahl: so you have.

but i think sometimes i, like-- i'm like, "oh, i really wish i could-- i could compete as a girl. because i want to win that race." it's fun to win, and it's something that i worked really hard for. and, you know, i-- i work the same amount. but-- but now i'm-- i'm working the same amount for 16th place, you know? >> stahl: and that's okay? >> schuyler bailar: and that's okay. it's the way it is. and it's also a lot of fun. it has other kinds of glory in it. >> stahl: different kind of glory. >> schuyler bailar: definitely a different kind. it's a glory that, like, fills me inside. >> stahl: compared to one year ago, how are you feeling? >> schuyler bailar: proud. >> stahl: in the months since our story aired, schuyler has continued to improve, shaving several seconds off his best times. he is now training for his sophomore season with the team. >> how does a family change when a daughter becomes a son? find out at 60minutesovertime.com. i don't want to live with

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